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Risk Management Best Practices

All businesses and associations are exposed to potential liability exposures at the office or at hosted conferences/trade shows. Liability exposures are created by vendors, exhibitors, service providers, hosted functions, or hired contractors. "Best business practices" should be implemented to mitigate this liability and provide a significant degree of protection in the event of a suit. Items include:

  Certificate of Insurance
  Contracts, Hold Harmless clause
  Liquor Liability
  Negligent Entrustment

Certificate of Insurance

Obtain a certificate of insurance from all vendors and exhibitors. Including, companies hired for set up, delivery, security, customer relations, food and drink. Review this document for accuracy prior to the event.

A certificate of insurance is a standard business document used to verify existence of insurance, obtained from the other person's insurance provider.

What to request in a certificate of insurance?

Liability and Umbrella policies, Workers' Compensation and Automobile insurance coverages. Individual insurance coverage is listed separately with policy number and date for effective/expiration dates, along with name of the insurance company. When these are not listed, assume there is no insurance coverage.

Insurance policy limits can be discussed with your agent and may be different depending on the event or liability exposures. Minimum liability limits $1,000,000 with an umbrella policy. Automobile limits need are based on the minimum requirement $300,000/$500,000 is typical.

Additional insured. Request that your association/organization is listed as an "additional insured" on their policy. This insurance policy will respond in the event of a liability injury/damage occurrence up to the limits of the policy.

Contracts, Hold Harmless clause

Be careful to read and understand what you sign. You may be signing away your right to seek restitution for injury caused by the other party. The standard contract will have one or more paragraphs/sections stating that in the event of an accident with resulting damage/injury the company listed on the contract is "held harmless". With this language, your ability to recover for damages is limited.

Your attorney should review the contact in order to be aware of both beneficial and harmful language.

It is desirable for contracts prepared by your attorney to include "hold harmless" language protecting your association.

Liquor Liability

Serving alcohol at no cost or for sale is an additional liability exposure for your association. If someone is served alcoholic drinks at an association sponsored event and later is involved in an accident which injures them or others, your association could be held liable. Standard liability laws may apply or in some states with Dram Shop Laws absolute liability is placed on the person/business providing the alcohol.

Risk Management controls for alcohol consumption: limited open bar time, limited number of drinks by issuing drink tickets, having a responsible person on hand with alcohol server training. Bringing in other alcohol should not permitted.

Negligent Entrustment

"Negligent Entrustment" is a legal term; you trusted someone with something potentially dangerous, and you knew or should have known better to trust that person. This is primarily applied where there is driving exposures; someone employed as a full time driver, driving in due course of conducting business or incidental driving.

Risk Management controls: Motor Vehicle Record (MVR) evaluation completed prior to driving and on an annual basis. Establish MVR evaluation criteria, as supplied by your insurance agent.

Summary

Effective implementation of Risk Management Controls is the key to successful mitigation of liability exposures. We do not know when or how an unfortunate event may have an adverse impact on our association/business. Actions and controls implemented prior to an event will provide an avenue for a successful outcome.

HS3-21-07
Loss Prevention consultation services are provided by Great American Insurance Companies to assist management of insured firms in fulfilling their responsibilities for the control of potential loss producing situations involving their premises and/or operations.

Great American does not warrant that all potential hazards and conditions have been evaluated or identified, or that they are safely controlled. The liability of Great American Insurance Company (and/or its affiliates and subsidiaries) is limited to the terms, limits, conditions of the insurance policies which it writes. Great American Insurance Company assumes no liability beyond that provided under the terms, limits, and conditions of the policies it has issued, when engaging in Loss Prevention consultation services.
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